Author: Matt Rickerby Aug 01, 2022 5 Min READ

Understanding Software for Running a 4PL

5 Min READ
Understanding Software for Running a 4PL

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A 4PL is a third-party logistics provider (3PL) that takes on a higher level of responsibility and coordination for its clients' supply chain operations. While a traditional 3PL may provide transportation, warehousing, and distribution services, a 4PL acts as an integrator and manages all aspects of a client's supply chain, including outsourcing these services to other logistics providers such as 3PLs, carriers, and freight forwarders.

Taking a higher level of responsibility and coordination means that 4PLs need specialized software to provide supply chain solutions that go beyond the scope of typical warehouse management software. With software, they can help to improve efficiency, reduce costs, and enhance the customer experience.,

Why do you need software to run a 4PL?

Software is an essential tool for running a 4PL (Fourth-Party Logistics) company, as it can help to manage complex logistics operations, increase efficiency, and provide visibility, control, and management capabilities.

One of the main benefits of using software for a 4PL is automation. You can reduce errors, increase efficiency, and save time by automating manual tasks such as shipping and tracking.

See how Extensiv revolutionizes 4PL

A software solution can also provide real-time visibility into your supply chain operations, allowing you to make informed decisions, resolve issues quickly, and improve customer satisfaction. This can also enhance collaboration and reduce silos, leading to improved communication and decision-making across different departments and stakeholders.

Another critical benefit of software for a 4PL is the ability to streamline operations. Integrating different systems and processes ensures that your 4PL operations are running smoothly and efficiently. This can also reduce manual interventions and increase scalability, allowing you to manage and monitor large volumes of data and transactions. Additionally, the software can provide valuable insights and analytics, enabling you to make data-driven decisions and continuously improve your operations.

Overall, software is a critical tool for running a 4PL company and can help you to increase efficiency, reduce costs, and enhance the customer experience. By utilizing software, you can ensure that your 4PL operations run smoothly and effectively, enabling you to remain competitive and grow your business.

What software exists for running a 4PL?

A 4PL (Fourth-Party Logistics) company requires software that can handle complex logistics operations and provide visibility, control, and management capabilities. Some popular software options for running a 4PL include:

  1. Manhattan Associates - A supply chain management software that provides real-time visibility and control over global logistics operations.
  2. Oracle Logistics Cloud - A cloud-based platform that offers end-to-end supply chain management, including transportation management, global trade management, and logistics execution.
  3. SAP Logistics - A comprehensive supply chain management solution that covers all aspects of logistics, from procurement to delivery.
  4. JDA Software - A supply chain management software that provides solutions for transportation management, warehouse management, and supply chain visibility.
  5. Infor LX - A cloud-based logistics software that provides advanced capabilities for transportation management, warehouse management, and global trade management.
  6. Extensiv - The leader provider in software solutions for 3PLs has specifically developed new software solutions and a network for 4PLS and 3PLs looking to build 4PLs.

Note that these are just a few examples of software that can be used for running a 4PL. The choice of software will depend on the specific requirements and operations of the 4PL company.

What is the difference between a 4PL and a fulfillment network?

A fulfillment network refers to a network of warehouses, distribution centers, and transportation carriers that are used to store, manage, and distribute products. This network is often used by e-commerce businesses and other companies that need to store, manage, and deliver products to customers.

A Fourth-Party Logistics (4PL) company is a type of logistics service provider that coordinates and manages the various components of a supply chain, including transportation, warehousing, and distribution. 4PL companies often employ a fulfillment network to provide end-to-end logistics solutions for their clients.

The 4PL provider leverages the resources and capabilities of the fulfillment network to provide comprehensive logistics solutions for its clients. This allows the 4PL to offer a wide range of services, including order management, transportation management, warehousing, and distribution. By leveraging the resources of a fulfillment network, the 4PL can provide its clients with a flexible and scalable solution that can adapt to changing market conditions.

A fulfillment network is what allows a 4PL provider to provide a comprehensive logistics solution to its clients while leveraging the resources and capabilities of the fulfillment network.

How can software help 4PLs address order routing?

In the context of Fourth-Party Logistics (4PL), order routing is a critical component of the logistics managemen/fulfillment process. 4PL companies are responsible for coordinating and managing the various components of a supply chain, including transportation, warehousing, and distribution. As such, they need to make decisions about how to route orders to ensure that they are delivered to customers in a timely and cost-effective manner.

Order routing is often automated using Saas software that considers various factors, such as delivery time, cost, and availability of transportation, to determine the best route. This allows 4PLs to quickly and easily make decisions about how to route orders and ensure that they are delivered on time. For example, Extensiv Network Manager automatically send orders to the best fulfillment center in the network based upon virtually unlimited business rules, and seamless order flows from cart to the WMS—with real-time order processing status across all servicing facilities.

Overall, order routing is a critical component of 4PL operations, as it enables 4PLs to make informed decisions about how to transport orders and ensure that they are delivered to customers in a timely and cost-effective manner. By automating the order routing process using software like Network Manager, 4PLs can increase efficiency, reduce costs, and improve the customer experience.

How can 3PLs use 4PL software to create a network and compete at scale?

Consumer expectations for fast and free delivery have led brands to seek broader geographic fulfillment models beyond single-point distribution. Space restrictions, start-up costs, risk volatility and, other considerations can keep smaller warehouses from expanding - thus losing customer relationships to larger 3PLs or 4PL networks. 

For 3PL companies looking to compete at scale, Extensiv Network Manager provides the technology to manage fulfillment projects through a reliable network of partner warehouses that can expand geographic reach, increase service offerings, and improve SLAs - while reducing both your and your customers’ overall operating expenses. 

 “The Network Manager team did an amazing job streamlining our order routing rules. Network Manager has made it so much easier to process Seller Fulfilled Prime orders in our network, as well as provide inventory visibility across multiple facilities.”

- Matthew Schneider, Senior Account Manager at Rocket Shippers

As the leading provider of warehouse management systems for 3PLs, Extensiv has over 1500 3PLs that leverage its software for all business needs– from invoicing to inventory management.

With Extensiv Network Manager, you can:

  • Expand your warehouse capacity and geographic reach with trusted partners from Extensiv’s Fulfillment Marketplace  
  • Increase your potential revenue and profit by owning the customer relationship and managing their fulfillment activities through network warehouses 
  • Get full visibility to your customers’ inventory, order, and transaction data across all 3PL warehouses - all in one place - without duplicate entry or complicated integrations 
  • Automate order routing and management to leverage multi-facility fulfillment 
  • Quickly expand into new markets locally, nationally, and globally 
  • Support resources for migrations, analytics, and consultations to help build complete fulfillment solutions for your customers 

In Summary

Software plays a critical role in the operations of Fourth-Party Logistics (4PL) providers. It helps 4PLs to manage complex logistics operations, automate manual tasks, increase efficiency, and provide visibility, control, and management capabilities. By utilizing software, 4PLs can:

  1. Automate tasks such as shipping and tracking, reducing errors, increasing efficiency, and saving time.
  2. Provide real-time visibility into supply chain operations, allowing for informed decisions and improved customer satisfaction.
  3. Streamline operations by integrating different systems and processes, reducing manual interventions and increasing scalability.
  4. Provide valuable insights and analytics, allowing for data-driven decisions and continuous improvement.
  5. Facilitate order routing by automating the process of determining the most efficient and cost-effective way to transport an order.

Overall, software like Extensiv Network Manager is a critical tool for 4PLs and enables them to remain competitive and grow their business by increasing efficiency, reducing costs, and enhancing the customer experience. By utilizing software, 4PLs can ensure that their operations are running smoothly and effectively, enabling them to provide comprehensive and effective logistics solutions to their clients.

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Written By:
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Matt Rickerby

Matthew Rickerby is the Director of Digital Marketing at Extensiv, the leading solution for multichannel, multi-warehouse D2C brands. For the past ten years, he’s covered ecommerce topics ranging from conversion rate optimization to supply chain management.

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